KEY POINTS:
Andrew Ferrier
Fonterra Chief Executive
Fonterra chief executive Andrew Ferrier has had a challenging year, with shareholders strongly questioning the co-op's performance. He's using the summer break to spend time with his family.
How would you describe 2006 for Fonterra?
It has been a tough year for our farmers with increasing on-farm costs and tightening cash flows. For our employees, it has also been challenging as we continue to push hard to improve productivity and reduce costs, and that touches everyone. The silver lining is that we are seeing some exciting growth in our value-added businesses. All of these activities are focused on improving farmer payout.
What was your company's greatest achievement?
I believe our joint venture with San Lu in China. While it is still early days yet - and we are just six months into that relationship - the potential in China is enormous and we have aligned ourselves with a top-flight player in China.
And greatest disappointment?
The impact on our farmers of the very high New Zealand dollar. It has been very disappointing to see Fonterra's lift in US dollar revenue and profits eroded by the currency conversion.
What do you think 2007 will bring for Fonterra?
Both our ingredients and brands businesses will build their contribution to profits. And, while the world dairy commodity market is strengthening, it is still too early to predict whether the exchange [rate] will continue to offset improvements in the market.
What will be the major challenges for Fonterra in 2007?
During 2007 the board, management and shareholders will be focused on developing an improved capital structure for Fonterra that will equip the co-operative to remain competitive for the future.
Where are you going for the holidays?
I'll be spending time at home here in New Zealand with my family. I spend a lot of time during the year visiting farmers around New Zealand and travelling overseas building our business. This has meant a lot of time spent away from home so it will be good to have some family time with my wife and three children.
What will you be reading?
I think I'll stick to light stuff. I enjoy a good novel and I look forward to a little free time.
